Alongside all the hype and chatter about the January 6 anniversary, there was another worthy news story the first week of 2022. On Monday, January 3, a federal jury in California convicted Theranos founder Elizabeth Holmes on three counts of wire fraud and one of conspiracy to defraud investors. Holmes, six years removed from being the richest self-made woman in the world, now faces as many as twenty years in prison, though she will likely receive less.
While it’s always good to see criminals receive their just desserts, there is another upbeat aspect to the Holmes saga. The conviction of Holmes isn’t just an indictment of her fraudulent business practices. It’s a profound and permanent humiliation for America’s entire incompetent, vacuous leadership caste.
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Between 2003 and 2016, Theranos collected more than $700 million in venture capital funding based on its promise to develop revolutionary blood tests that could be done almost instantly, with just a single drop of blood, at a fraction of the price of existing tests. This was a promise of a bold, massive, out-of-nowhere technological leap in a mature industry. The founder Elizabeth Holmes’ business plan was comparable to a 20-year-old promising to upend the automobile market by inventing a flying car that gets 200 miles a gallon and can be sold for ten thousand dollars.
Countless wealthy, influential, and politically-connected people fell for her promises and were entirely snookered for years on end. Sunk costs create a certain psychological hold that a con can use to hook the mark. Sure enough, many of Holmes’ victims continued to defend her as late as 2018, even as she burned through their reputations and nearly a billion dollars of other people’s money.
A 2014 profile by The New Yorker’s Ken Auletta perfectly demonstrated how easily Holmes bamboozled a credulous media and elite eager to have their political biases confirmed. Apparently, there is no shortage of horny boomer men and feminist boomer women ready to fall for a strong, independent girlboss-extraordinaire-in-a-Steve Jobs-turtleneck who breaks all those pesky and inconvenient stereotypes about “women in tech.”
Holmes’ steamy affair with the company’s Indian president Ramesh Balwani (19 years her senior) may have been an open secret, but the New Yorker simply wrote that Holmes “doesn’t date” due to her single-minded focus on business.
Holmes’s infamous summary of her own technology went this way: “A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.” The New Yorker’s Auletta apparently let that ridiculous line glide past him and into the pages of the prestigious magazine without blinking.
Holmes also claimed her company’s blood-testing machines could turn around speedy results thanks to “automation.”
At one point, she bragged about making a “complete design for a time machine” when she was seven years old.
Holmes could get away with it because she adroitly pushed the buttons of what elites wanted to hear, not merely by being a woman but indulging particular tropes of the late Obama era.
“The wonderful thing about the way I was raised is that no one ever told me that I couldn’t do those things,” Holmes told Auletta. Yas kween slayyyyyyyyyy! Holmes filled a yawning political void, the massive craving of 2010s America for a woman startup billionaire on the same tier as Zuckerberg, Gates, or Musk, and she filled that void while providing cheap fodder against the patriarchy. No one told Elizabeth Holmes that she “couldn’t do those things” that the pesky men do, and of course she had the potential to found a revolutionary start-up.
Besides speaking in pseudo-scientific gibberish, Holmes herself was like a caricature of the innovative tech CEO. She dressed in black turtlenecks to copy Steve Jobs, and adopted a fake, ultra-deep baritone voice to seem more authoritative.
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Notoriously, Theranos gained much of its legitimacy from Holmes’s cultivation of big names who didn’t actually have much experience in the health industry, or any kind of technology at all. For that, Holmes knew exactly where to go: The highest halls of power in the United States government, packed to the gills with people whose only claim to fame was worming into high public office, without any other required track record of skills, knowledge, or success.
Theranos’s board at one time or another included four-time Cabinet secretary George Shultz, Henry Kissinger, former Senate Majority Leader Bill Frist, former Senate Armed Services Committee Chairman Sam Nunn, and by former Wells Fargo chairman and CEO Richard Kovacevich. Shultz believed in Holmes so fervently that when his grandson Tyler tried tell the truth about the company’s fraudulent blood tests, Shultz chose Holmes over his own grandson, avoiding contact with him and staying on Theranos’s board while the company’s lawyers tried to destroy Tyler’s life.
Mattis was one of the key marks in Elizabeth Holmes’ legendary Theranos scam. As a general, Mattis was bamboozled by Holmes’ bogus blood tests, and sought to buy them for use by the military. Later, in 2013, Mattis was recruited to the company’s board of directors, a gig which earned him a six figure annual sum.
Mattis’s presence was critical to the Theranos fraud. Holmes’s strategy was to recruit aging “big names” who had made their name in other fields (other board members included former Secretaries of State Henry Kissinger and George Schultz), but Mattis’ involvement was particularly important. Theranos publicly claimed that its blood tests had been deployed in the field by U.S. troops in Afghanistan, a bogus claim that Mattis’s presence abetted. Even when he was still an active-duty general, Mattis worked aggressively on the company’s behalf. … Theranos was exposed publicly as a fraud in October 2015 by the Wall Street Journal, but Mattis continued to sit on the company’s board and continued to shill for its technology. In December 2015 he told The Washington Post he “had quickly seen tremendous potential in the technologies Theranos develops, and I have the greatest respect for the company’s mission and integrity.”
In reality, Theranos had developed no technology at all, and the company was devoid of integrity. But Mattis sat on the company’s board all the way to January 2017, when he left to join the Trump Administration. Theranos finally folded in 2018.
But it wasn’t just security state fossils who were drawn into the Theranos maelstrom. Channing Robertson, a Stanford chemical engineering professor, was one of the company’s first board members and eventually a full-time employee. Perhaps Theranos was far enough outside Robertson’s wheelhouse for him to not immediately realize that the company and its tests were a sham. But apparently, Robertson continued to be fooled for more than a decade. In 2014, Robertson ranked Holmes as on par with Bill Gates and Steve Jobs. In December 2015, with the fraud on the brink of collapse, Robertson babbled to The New York Times that mentoring Holmes was “akin to teaching Beethoven to play piano or teaching science to Einstein.”
Sure, not everyone was taken in by all this. But the group that was taken in, decisively and completely, were wealthy, geriatric veterans of the U.S. military/diplomatic/security state, who have proven to be some of the most easily-fooled nullities in the history of any government.
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So, why should we take encouragement in the Theranos disaster? Because it shows our ruling class are not the omniscient masters of the universe they pretend they are.
Beaten-down members of America’s kulak class can be forgiven for thinking that everything always works out for America’s ruling class. America’s economy seems faker every day, our cities are crumbling, crime is exploding, and the people responsible for it all seem to be immune from consequences. Many on the right are predisposed to see a deliberate plan behind even the most humiliating national catastrophe. If the Globalist American Empire looks like a garish joke (and it does), it must be that those in control know exactly what they are doing, and everything is going according to plan for their benefit.
Fortunately, it isn’t true. America’s ruling elites are screw-ups. For many, their only skill at all is having the right sex, skin color, or surname. Others once had real talent, but have aged into senility while refusing to pass the torch to others. And some have simply ruined themselves through decades of overriding their own common sense in obedience to an insane ideology that makes no sense.
While this elite has been able to shield itself from the full consequences of its failure, it certainly is not omniscient or omnicompetent. Today, the same class of people that fell for Theranos is falling for the idea that diversity is the military’s greatest strength and that America needs more trans admirals to win the wars of the 21st century. They can blow a billion dollars of their own money on an obvious scam, just like they blew America’s military advantage on diversity and LGBT, and just like they blew the CIA and FBI’s residual credibility chasing after Russian collusion and Havana Syndrome.
That this clueless elite still had enough wealth to blow on a scam as obvious as Theranos is strong evidence for what Revolver wrote last month on the cryptocurrency memecoin/”shitcoin” phenomenon.
Shitcoins are not some absurd deviation from an otherwise sound financial system that is responsibly and discernibly connected to the creation of real value. Quite the contrary — the absurdity of shitcoins does not represent an exception to the overall financial system, but a perfect crystallization of it. Lacking the narrative window dressing that affords other sectors of the financial system a patina of legitimacy, the shitcoin phenomenon affords us a naked and unvarnished glimpse into the scam that is our entire economy.
Is the fact that it is possible to make billions from a “dog coin” any more ridiculous than the fact that a figure such as Elizabeth Holmes was able to ride the Regime-promoted meme of “women in tech” to fool some of the most powerful men in the country (including the disgraced and pathetic General Mattis) into supporting and investing in her biotechnology company Theranos? Which is more absurd and outrageous, the Shiba Inu meme coin or the Elizabeth Holmes meme coin, so to speak?
This has ramifications for all kinds of political questions. It even has ramifications for January 6. If a half-dozen former Cabinet officials and agency heads were softheaded enough to be bamboozled by Elizabeth Holmes, then why should competence be expected in any other endeavor? So long as brave patriots continue to look for the full truth, the real story of January 6 will eventually come out, because how would an elite this clueless ever be capable of covering it up forever? Why will the hell of permanent Covid hysteria end? Because those in power are truthfully too dumb to keep it going forever.
So enjoy the security state’s moment of humiliation. Because an elite that can get embarrassed and defrauded can also be beaten.